Economic Strangulation: From a General Financial Crisis to an Existential Threat

SadaNews - About a year ago, the Israeli government decided to cease the transfer of all tax revenues to the Palestinian Authority, a move that deprived the public treasury of approximately two-thirds of its due revenues, amounting to more than (10) billion shekels annually. This "zeroing out" of all tax revenues came without any justifications, nor even under any Israeli Knesset law or official government decision, but rather a decision by the extremist Finance Minister "Smotrich," supported by key figures in the Israeli government, as part of a clearly defined and openly declared Israeli strategy regarding the economic strangulation of the Palestinians, with the aim of undermining Palestinian identity, drying up the financial resources of the Palestinian Authority, and portraying it as incapable of meeting the basic services required for its citizens, particularly in terms of government employee salaries, pensions, and other entities dependent on government salaries, ultimately leading to the irregular provision of public services to the Palestinian population, especially in health, education, social protection, and more.

The Israeli actions did not stop at "zeroing out" tax revenues and cutting off the most significant sources of the public treasury, but they coincided with a series of other Israeli measures targeting the backbone of the national economy, such as the banking sector, the private sector, and even civil society institutions. It extended beyond that to prevent Palestinians from accessing their basic rights to jobs. These measures included creating a crisis of shekel accumulation, which is now threatening the banking sector, the private sector, and citizens alike, as well as closing the Israeli market to around (205) thousand Palestinian workers for the past two and a half years, and the ongoing threat of severing banking relations between Palestinian and Israeli banks. The full blockade imposed on all Palestinian villages and cities through a policy of gates and checkpoints, which number over a thousand gates and barriers, as well as the obstacles to import and export movement, have also increased costs on supply chains. In addition to the tightening and escalating strangulation of the work of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), restrictive measures on international institutions operating in the Palestinian territories, and creating constraints on the activities of civil society organizations in Palestine, added to the violence of settlers in the West Bank, which has now threatened the lives and livelihoods of Palestinian citizens.

It is not coincidental that these escalating measures coincide with a report from the extremist settlement organization "Regavim," or statements from Israeli leaders and officials headed by Finance Minister "Smotrich," the head of the Religious Zionism Party, the Minister of Economy "Berkat" from the Likud Party, and even former Israeli Defense Minister "Liberman" from the opposition and head of the Yisrael Beiteinu Party, which all intersect on the necessity of ending Palestinian identity, especially in the West Bank, preventing the establishment of a Palestinian state, stripping the Palestinian citizen of their national rights, and creating an environment that is hostile to life or investment in Palestine through both hard and soft power. The economy has become a primary operational strategy to achieve this vision, creating a public situation – under the pressures of economic strangulation and systematic impoverishment – towards accepting any other solutions at the expense of Palestinian identity and national rights, and by working to restructure Palestinian collective consciousness, employing tools of economic pressure to create structural and social collapses, and concocting a situation of "creative chaos" that makes the Palestinian seek individual solutions to their living crises, relentlessly pursuing daily needs at the expense of their national issues.

Through analyzing the time series of Israeli measures, particularly in terms of economic strangulation, they are continuously escalating, suffocating the Palestinians, and forming an existential threat to the Palestinian people. This necessitates the solidarity and integration of the entire Palestinian community to create and articulate a national strategy to face this existential threat, before it is too late. The crisis is not just a "salaries" crisis, nor is it merely a technical issue related to the shekel block in the Palestinian economy. Reducing the crisis to a general financial crisis is an escape from reality. The technical measures by the Ministry of Finance, despite all their efforts to adapt to the crisis, will not resolve it since its root is distinctly political and stems from a comprehensive Israeli strategy. Waiting for the upcoming Israeli elections or the American congressional midterms, hoping for change, is relying on the unknown.

Once again, perhaps there is still time to address the situation through a comprehensive Palestinian national strategy, but waiting for "Godo," who will never come, hoping for future solutions, will make the cost of any forthcoming solutions higher, particularly since Israel is racing against time to gain actual control over the West Bank, create a life-hostile environment, and establish facts on the ground that "Smotrich" described as changes akin to altering the DNA of the regime, such that they are slow, sustainable, and irreversible.